Where to Buy Silver in Houston

Where to buy Silver in Houston?  Should I even consider buying silver coins locally or should I buy them with an online company?  These are all questions that gold and silver investors should ask.

 Advantages of Buying Silver in Houston

There are many advantages to buying gold coins in Houston from a local company.  First, an investor can save money by avoiding the shipping and insurance charges.  These charges are usually $20-$55 per order depending on the company.  Second, when you as an investor buy gold from a local company, you can examine the merchandise, pay for it, and the transaction is done.  You don’t have to monitor the online payment, wait for the shipment, and worry about the shipment coming while you are not home.  Third, you as a buyer of gold in Houston get to form a relationship with an individual and company who can help you sell the gold when the time comes and also give you advice on exiting the gold market.

 Should I Buy Silver Coins at a Coin Shop?

Should you buy gold coins from a coin shop in Houston?  Unfortunately there are far to many disadvantages to buying gold from a coin shop.  First, most coins shops have very uncompetitive prices.  On average my company is between 2-7% cheaper than most coin shops in Houston.  Second, in many cases there is a complete disregard for investor privacy.  Silver and gold dealers are required by law to obtain an investor first and last name and nothing more.  However, many coin shops in Houston require that you show your drivers license and in many cases they will keep a copy on file.  Finally, most coins shops don’t have firm understanding of economics and as a result their recommendations on which gold to buy is often not based on the most important and relevant information.

 Should I Buy Silver Numismatic Coins?

Should you buy silver numismatic coins in Houston?  There are three major reasons why silver numismatic coins will be a bad investment over the next decade.  First, one of the main reasons investors consider buying silver numismatic coins is they have been told that they can’t be confiscated by the federal government.  Most investors believe this because of Roosevelt’s confiscation of gold in the 1930’s.  However, this simply isn’t true.  In 1933, the United States was on the gold standard, which meant that every dollar in circulation was backed by physical gold.  This meant that FDR could not simply print money in order to finance his massive spending and this is why FDR ended up confiscating gold.  He could not inflate the dollar until he controlled the value of the gold.  It is important to note here that the US government held 68.2% of the world’s supply of gold at the time.  Once Roosevelt made gold ownership illegal, he immediately raised the price of gold to $35 an ounce.  This immediately devalued the dollar by 40% over night.  This is truly the reason why Franklin Delano Roosevelt confiscated gold.  Therefore FDR would not confiscate gold or silver today because the Fed now has the ability to inflate the money supply without controlling the gold supply.  Second the Government is also to not likely confiscate gold or silver in order to gain extra funds when they could confiscate the $7.3 Trillion rapped up in retirement accounts today, which they already regulate and control in many ways.

The second reason investor consider buying silver numismatic coins in Houston is because they believe that they have to report purchase of gold and silver bullion to the government, but not for numismatics.  Once again, this simply isn’t true.  Neither numismatic coins nor bullion require any reporting when they are bought and it is only when silver is sold back to a dealer in excess of 1000oz or in gold in excess of 25oz at a time that a dealer has to report anything to the government.

The final reason investors consider buying silver numismatic coins in Houston is because they believe that numismatic coins will outperform regular bullion.  However, when an investor examines all the factors this is quite unlikely.  First, if the price of silver or gold goes up will numismatic coins or bullion perform better?  Let’s say for example, silver goes up 177% from $18 to $50, then a one-ounce numismatic collectible coin valued at $100 is likely to go up by only 32% to $132. The collectible coin will go up based on the silver it contains, but there’s no reason to think the numismatic premium will increase too. On the other hand the same $100 in bullion is now worth $277, a difference of 145%!

Numismatic coins owe their value above the silver cost exclusively to their rareness and collectability.  Historically, during times of economic hardship these types of purchases do very poorly because the demand for them drop and as a result the premium over the price of gold or silver charged goes down.  So in some cases it is possible to see the price of silver and gold go up and the value of numismatic gold and silver coins go down!

A salesman might have a chart showing the performance of “rare/collectible/numismatic coins” against “regular/bullion coins.” Of course, the chart shows the numismatics performing much better. But these graphs inevitably track particular rare coins, which are cherry-picked with the benefit of hindsight. For every one rare coin that outperforms, there could be ten to twenty that severely underperform. Only afterward would you know which coin you should have bought. Additionally performance charts often omit the dealer’s high markups and markdowns that would more than wipe out the alleged profits for retail investors.  In the end, investing in numismatic coins is far inferior to bullion.